Canberra’s homes recorded the second-strongest growth in values of the Australian capital cities over August, at 0.9 per cent growth over the month, according to the monthly RP Data-Rismark property value index.

RP Data research director Tim Lawless said the results over the past three months revealed strong growth for the capital, at 3.7 per cent, and transaction records up to June showed sales numbers were also high.

“That’s a pretty decent result, and it probably runs at odds with the speculation the Canberra market would be slowing down pre-election. That doesn’t seem to have been the case, largely,” Mr Lawless said.

Canberra prices have now pushed 1.2 per cent higher than the previous market peak in May 2012, second only to Sydney for value growth. Median dwelling prices in the ACT now sit at $503,500, making it the third most expensive capital city in the country.

In addition to the strong value performance, building approvals in the ACT were also the strongest in the country in July at 12.6 per cent in trend terms, according to the Australian Bureau of Statistics, compared to 0.9 per cent national average.

In raw terms, there were $266.1 million worth of building approvals in the ACT in July, with residential approvals accounting for $213.8 million.

Despite the rise in dwelling values and building approvals, growth in the rental market has slowed compared to what’s usually seen in Canberra, and Mr Lawless said predicted job cuts in Canberra after the election could lead to “more sedate” results in the property market in coming months. But he said with Canberra values showing good resilience at the moment, predictions post-election were “quite speculative”.

“Who knows how the market’s going to pan out? To date it’s been quite resilient, but you have to think that if there are some job cuts in the wings, that it’s going to have a negative impact on the market,” he said.

“Higher rate of unemployment, less jobs growth, that’s going to impact on housing demand, it generally means you won’t have a strong population growth. It may impact on the vacancy rate, so you’ll see vacancy rates rise, and potentially that will have a negative impact on rental markets.

“But probably more importantly the real impact is just on local sentiment. Higher unemployment and weaker labour market generally means consumers become less confident and that would be reflected in a lower number of transactions, and probably some downwards pressure on prices.

Across the country, growth in property values steadied out over the month of August, with an average growth rate of 0.5 per cent, compared with 1.9 per cent in June and 1.6 per cent in July.

The best performing capital over the quarter was Sydney, which recorded a 5.4 per cent growth in values, and maintains the top spot for median dwelling price at $587,000, while Hobart is the most affordable capital with a median dwelling price of $289,000.

Mr Lawless said the August slowdown would be a relief after strong growth in June and July fuelled debate around the sustainability of property prices in Australia.

“The half a per cent gain over the month of August is a much more sustainable rate of growth and will be a welcome turn of events for policy makers,” Mr Lawless said.

“While the recent surge in dwelling values has caused some renewed debate about an Australian housing bubble, it is important to remember that the average annual capital gain over the past decade has been just 4.3 per cent across the combined capital cities.”

According to the RP Data-Rismark index, growth was strongest across the middle section of the market, while the “more prestigious” end was also gathering momentum. Spring is predicted to show strong conditions across the country.

“Housing market conditions are looking set to provide what could be described as a near-to perfect spring season with the number of homes currently available for sale around 15 per cent lower than a year ago,” Mr Lawless said.

“We are already seeing a substantial increase in real estate agent activity across the RP Data platforms which indicate a surge in pre-listings activity.”